The government has offered a 4% increase on the amount general practices get paid per patient, a number which GP leaders say is too low to meet cost pressures and will inevitably mean fees will be hiked.
WellSouth chairman Dr Doug Hill said the situation was becoming increasingly fraught.
"I can safely say that primary care is in the worst position I have seen it.
"The model is no longer fit for purpose and the recent annual uplift is simply not enough.
"It will only compound the pressures felt across our Southland and Otago general practice networks."
The primary health sector in the South was already struggling.
Patients across Otago and Southland experienced long wait times or difficulty registering with a local practice.
"Without adequate funding, practices are having to take a hard look at how to make this work.
"No GP wants to raise patient fees — ready access to affordable, high-quality primary care is a key component of health — but there is a clear directive from Health New Zealand [HNZ] that they expect any funding shortfall to be made up by patients."
The maximum allowable adult GP consultation fee was $65, an increase from the previous year’s $55.
"We expect that most practices in the region will have to charge this in order to maintain services.
"That will hit many patients hard, particularly those already struggling to make ends meet, and put up another barrier for people to get help when they need it.
"When people avoid seeing their GP or nurse, their conditions may worsen and they end up in our emergency departments."
There was also the matter of a "lack of GPs or nurses, collapsing after hours, burnt-out clinicians and practices struggling to break even".
Asked whether practices could close their doors, Dr Hill said "I think they will do all they can to avoid that as we all really care about our patients not want them to be without care, but GPs can only subsidise the underfunded health system for so long".
"The alternative is if a general practice closes, patients will try to enrol elsewhere, if they can.
"In some cases, thinking about our rural practices — there are around 36 on the WellSouth general practice network that are considered rural — the next nearest practice might be an hour away, posing yet another barrier to get care."
HNZ living well director Martin Hefford said primary care was the cornerstone of the health system and it acknowledged "the cost pressures they are facing and the growing demand on their services".
"[HNZ]-provided services are facing the similar pressures in a fiscally constrained environment.
"Through our annual capitation uplift offer, we have worked hard to target available funding where it is most needed to support primary healthcare and general practice."
The rise of 4%, with a 7.76% increase in average allowable fee increases, resulted in a combined 5.88% total revenue increase.
"This matches the independent estimate of general practice services cost growth over the past 12 months from Sapere Research Group."
